IndustryWeek's 2008 Salary Survey: Are You Worth What They're Paying You?

"Manufacturing is a cut-throat world, margins are shrinking, energy costs are rising, stockholders are whining, and the resources that keep the wheels on the cart are suffering. As a manager I see the need to return to my blue-collar roots and appreciate the blood and sweat that is donated to capitalism." -- production manager with a plastics/rubber manufacturer with 6-10 years of experience, living in the Middle Atlantic region and earning $55,000

"In the next few years, the manufacturers in this country will be the best in the world or they'll be gone." -- corporate/ executive manager of a plastics/rubber manufacturer, with 20-25 years of experience, living in the Mountain region and earning $130,000

"I am pleased to work for my management due to their recognition of the working people in the factory, regardless of level. We are all valued and those of us in management are regularly recognized and thanked for the effort we expend on behalf of the company's success. We hire with an eye toward the promotability of the new hire. It is very important for America to raise the standard of working labor positions and support the U.S. manufacturing industry." -- operations manager at a food & beverage producer, with 26+ years of experience, living in the North Central region and earning $140,000

"Manufacturing is finished in the United States. R.I.P." -- engineering manager with a computer equipment manufacturer, with 26+ years of experience, living in the North Central region and earning $55,000

To understand the state of manufacturing in the United States, you need to recognize it as a study in contradictions. The number of people employed in manufacturing, for instance, continues to decline (with an annual rate of change projected at -1.1% over the next 10 years), and yet output and overall productivity improve every year. Low-cost goods imported from overseas are believed to be threatening the very existence of U.S. manufacturing, but in fact the rise in the number of exports from the United States indicates that as global economies grow, so too does the profitability of American manufacturers.

And closer to home, while the average annual salary of manufacturing managers in the United States basically remained flat over the past year (salaries dipped by 0.9%, from $106,588 in 2007 to $105,581 in 2008), the percentage of managers who are "very satisfied" or "satisfied" with manufacturing as a career path actually increased by 4% this year (from 79% to 83%).

That's just one of many "believe it or not" findings we uncovered in IndustryWeek's 2008 Salary Survey. Nearly 1,350 readers weighed in, and thanks to the anonymous nature of the survey, they revealed not only how much they earn, what kind of companies they work for and their level of experience, but also what matters most to them about their job, the biggest challenges confronting the industry, and even their frustrations and hopes for the days to come. They didn't just tell us what they do, but also why they do it.

Once we crunched all the numbers from the survey results, we discovered that the "average manufacturing manager" is a white male, between 50-59 years old, has worked in the manufacturing industry for more than 26 years, lives in the North Central region of the United States (i.e., the Midwest), has been with his current company for six to 10 years, has a bachelor's degree, works for a metals producer, and earns $105,581. But of course, there's no "one size fits all" description that can really illustrate the day-to-day doings of manufacturing managers, so to bring all these facts and figures to life, you'll find a running commentary on the industry from the men and women whose job it is to make sure things get made the right way.

What Do You Do?

"Imports are killing the furniture industry." -- corporate/executive manager at a building products manufacturer, with 11-15 years of experience, living in the Middle Atlantic region and earning $90,000

"In the automotive industry the players are becoming less numerous so we will probably see less innovation as the wagons are circled. There must be a renewed trust and investment in U.S. manufacturing. This is not only an economic concern, but a potential national security concern." -- director of production at an automotive manufacturer, with 20-25 years of experience, living in the South Central region and earning $120,000

"My company is in the semiconductor industry. Our CEO has openly chastised our manufacturing operations on several occasions so it does not take a rocket scientist to know he has little or no use for us. He would just as well see even more good paying jobs go offshore." -- production manager in the high-tech/electronics industry, with 26+ years of experience, living in the Mountain region and earning $120,000

The idea of a manufacturing "industry" is actually something of a misnomer. For bureaucracy's sake, the U.S. Bureau of Labor Statistics ranks all goods-producing companies (excluding agriculture, mining and construction) as "manufacturing," so companies that make toothpaste, diagnostic equipment, carburetors and MP3 players are all considered part of the overall manufacturing industry, and in fact IndustryWeek's readership is similarly diverse. So one of the first things we set out to learn was how many people work in each vertical industry, and what the average salary is for each industry.

More manufacturing managers work in the metals industry (12%) than any other industry, followed by automotive/transportation vehicle manufacturers (10%) and industrial machinery producers (9%). At the opposite end are manufacturers of computer equipment and peripherals, as only 1% of the respondents work in that area; there could be some overlap, though, as 6% say they work in the electronics/high-tech field.

According to last year's salary survey, the best-paid manufacturing managers were in the petroleum & coal sector, which given the record profits many oil companies have been reporting didn't come as much of a surprise. This year, managers at pharmaceutical/healthcare manufacturers -- perhaps the only sector whose merits are scrutinized by the popular press and political office-seekers more than the oil companies -- have captured the top spot for largest average salary ($137,010). Petroleum managers slipped all the way to sixth place.

Meanwhile, managers in the automotive industry ($94,399) and wood products/furniture makers ($90,862) -- two industries that have been hit particularly hard by foreign competition -- brought up the rear with the lowest average salaries.

Following the Sun

"I derive immense satisfaction from managing a successful and growing operation in central Illinois. So much for the Rust Belt." -- plant manager at a paper manufacturer, with 16-20 years of experience, living in the North Central region and earning $107,500

"Illinois companies are struggling because of many state government regulations, taxes, etc., that make it impossible to remain competitive." -- director of training with a consulting organization, with 6-10 years of experience, living in the North Central region and earning $50,000

"We are not in the industrial loop. We are located in a small, quiet town. This does not allow much competition for salaries. However, it does allow for a great place to live and raise a family. Individuals have to weigh those options." -- production manager with an aerospace & defense manufacturer, with 2-5 years of experience, living in the South Central region and earning $60,000

"Our purchasing department is being moved from California to Georgia. There are five people who will lose their jobs -- all due to the housing industry." -- purchasing director at a manufacturer of industrial tools, with 16-20 years of experience, living in the Pacific region and earning $94,000

It somehow doesn't seem fair. Not only do people living on the West Coast and in the Southeast enjoy the best weather, but they earn the highest average salaries, too. Manufacturing managers in the Pacific region (mostly California) earn $116,035, while those in the South Atlantic earn $113,128. Conversely, the North Central region (the Midwest, aka "the Rust Belt"), where 40% of all manufacturing managers live, has the second-lowest average salary, at $100,752. Only the South Central, which has the second-largest number of manufacturing managers (16%) did worse, at $98,569.

Adding insult to injury, average salaries in the Pacific and South Atlantic regions both increased in the past year (gaining 0.9% and 17%, respectively), whereas the North Central and South Central regions both declined (dropping 3% and 2%, respectively).

It's Still a Man's World

"There remains a significant difference in male vs. female salaries in like-titled jobs, regardless of experience or background." -- female quality manager at an aerospace & defense manufacturer with 26+ years of experience, living in the Middle Atlantic region and earning $65,000

"The glass ceiling for women is still intact." -- female production manager at a metals producer with 26+ years of experience, living in the North Central region and earning $78,000

"With all the focus on equal opportunity, as a white male I feel like I'm getting passed over." -- male supply chain manager at an electronics manufacturer with 11-15 years of experience, living in New England and earning $102,000

The good news is that the average salary for a female manufacturing manager rose $7,698 compared to last year's survey, representing a 10.6% jump. The gender gap between men and women also narrowed slightly -- a year ago men earned 35% more than women, with the average difference amounting to nearly $40,000. This year, the difference is $27,620, and the gap is a somewhat more modest 26%.

The bad news is that the percent of women in management positions dropped from 12% of the total a year ago to 10% this year. You can explain this discrepancy any number of ways -- for example, men on the average have worked in the manufacturing field, at all levels, far longer than women -- but there's no escaping the fact that the idea of "equal pay for equal work" has yet to truly take root in manufacturing.

Generation Gap

"I am concerned about our failing education system. To regain our competitive advantage sweeping adjustments must be made immediately. Our educational institutions must partner with industry, allowing American industry to compete with the rest of the world." -- plant manager at a manufacturer of construction/building equipment, with 26+ years of experience, living in the North Central region and earning $110,000

"$50K salary out of college with a 2.2 GPA -- not too shabby." -- engineering manager at an industrial coatings manufacturer, with less than 2 years of experience, living in the South Central region and earning $50,000

"Experienced people are being viewed as cost reduction opportunities." -- director of purchasing at a manufacturer of plumbing products, with 26+ years of experience, living in the North Central region and earning $100,000

"We must encourage those coming behind us that manufacturing is an honorable profession and that it is just as viable to be successful by learning and proving yourself through production ranks as it is to step into the front office right out of college." -- operations manager at a paper manufacturer, with 16-20 years of experience, living in the South Central region and earning $94,000

The most effective managers and executives are those who have an understanding of not only how their individual departments or plants are operating, but how they fit into the performance of their entire supply chain, explain William V. Fello, senior client partner, and Peter Everaert, regional market leader, with executive search firm Korn/Ferry International. Top-performing managers can explain how they have improved cycle time, order fulfillment or inventory turns, and they have the statistics to back it up, Fello and Everaert note. "[They] know the exact impact their changes and improvements are delivering, and when there is a problem that needs to be resolved fast."

Not surprisingly, these sorts of people are in rather short supply, and they come by their industry knowledge honestly: 71% of all manufacturing managers have at least a bachelor's degree, 71% have more than 15 years of experience in the industry and 46% have spent more than 10 years with their current employer. And, as you might expect, the older and more experienced you are, the better you're paid: Managers 60 or older earn the highest average salary, at $122,871; those with at least 20 years of experience earn more than $115,000; and those with a doctorate degree earn $147,121.

The flip side to these numbers is the big "uh oh" confronting U.S. manufacturers -- a dearth of young people entering the industry. Only 3% of survey respondents are in their 20s, only 18% are under 40 and just 7% have been in the manufacturing industry for less than five years. While part of that is no doubt due to the nature of the job itself -- managing a department or a plant is certainly not a responsibility to turn over to an untested rookie -- there's no getting past the reality that attracting and retaining talent to the field is one of the most pressing needs for manufacturers at companies of all sizes.

When asked the open-ended question, "What is the biggest challenge facing the manufacturing industry today?" more than 22% of all respondents pointed to labor shortages of one sort or another. One respondent summed the problem up succinctly: "aging workforce with little interest by the younger generation in manufacturing."

The other big area of concern, reflected by the survey results, is the economy itself, as the one thing that matters most to manufacturing managers about their job this year is job stability (20.8%), which ranked at No. 3 a year ago. Base salary (20.7%) finished very close behind at No. 2, while "recognition of your importance to your company" came in third (16%).

To close out with a note of optimism, however, it's worth noting that the percentage of manufacturing managers who are very satisfied or satisfied with the current job remains unchanged from a year ago: 74%. Any time you can find three out of four people who like their jobs, despite everything else going on, that's a clear sign that manufacturing managers are committed to their profession and their industry; and while the naysayers are quite vocal in their doomsday predictions, their pessimism is very much in the minority.

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